The full effect of the Bank of Canada’s July rate hike is evident in August’s drop in national sales activity, however, this slowdown is typical for the end of summer. It’s still unclear how the Bank of Canada’s September announcement to pause rate hikes will impact buyers, but Zoocasa’s Broker of Record & Industry Relations Officer Lauren Haw predicted that demand will bounce back in the fall. According to the Canadian Real Estate Association, national home sales were down 4.1% month-over-month, but the silver lining is that the housing supply is getting a chance to build up.
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“With sales slowing and new listings returning to more normal levels, demand and supply are continuing to come into better balance,” said Larry Cerqua, Chair of CREA. “This is giving buyers more time and more choice.”
Housing Supply Improving from the Beginning of 2023
Throughout much of 2023, there has been a noticeable shortage of available homes, leading to increased competition and higher prices. As buyers have been preoccupied with summer vacations, new listings were able to edge up to healthier levels in August.
The number of newly listed homes increased by 0.8% from July to August, but the more impressive improvement was seen between March and July, during which new listings experienced a cumulative gain of more than 24%. This has also allowed the sales-to-new-listings ratio (SNLR) to fall back within balanced territory. In April, the SNLR was at a peak of 67.4%, signifying a sellers’ market, but in August the SNLR dropped down to a balanced 56.2%.
Several markets also benefited from a bump in new listings including Fraser Valley, Kitchener-Waterloo, Greater Vancouver, London & St. Thomas, and Niagara Region which all experienced year-over-year increases of more than 10%.
Months of inventory improved from 3.2 months in July to 3.4 months in August, however, it’s worth noting that this is still below the long-term average of 5 months.
Decreased Market Activity Causes National and Local Prices to Drop
The national benchmark price in August decreased by 1% to $750,100, the result of slowing sales and demand. Quebec and the East Coast maintained price growth, with Saint John, Quebec City, and Montreal CMA experiencing month-over-month price increases of 1.6%, 1.3% and 0.3% respectively.
Calgary was the only other major market to experience a month-over-month price increase, while Greater Vancouver, the Prairies, and most of Ontario experienced month-over-month price declines. Kitchener-Waterloo experienced the largest month-over-month price drop, falling by 2.6% to $745,100, while Regina had the second-largest month-over-month drop at 1.9%, followed by the Greater Toronto Area at 1.7%.
If you’re preparing to enter the fall market, whether that’s through buying, selling, or both, it’s important to speak with a local realtor to learn about market conditions in your specific area. If you’re ready, give us a call today to speak with a qualified agent!
